U.S. missile tests. On Wednesday, defense officials said the U.S. will begin tests in the next few months for two types of intermediate-range missiles that were prohibited under the Intermediate-Range Nuclear Forces treaty. The U.S. and Russia are expected to withdraw in August from the 31-year-old treaty, which prohibits deployment of land-based cruise and ballistic missiles with ranges between 500 and 5,500 kilometers (310-3,400 miles). Neither of the new U.S. weapons – a low-flying cruise missile with a range of about 1,000 kilometers and a ballistic missile with a range of 3,000 to 4,000 kilometers – would be nuclear armed. The strategic value for the U.S. is marginal, which is probably why officials said the projects would stop if Washington and Moscow were to reach a new agreement on the INF treaty before August, signaling that the news may be part of a negotiating strategy. For one thing, the marginal benefits of ground-launched systems relative to existing air- or sea-launched missiles may not justify the time and resources necessary to develop them. And it’s unclear where the missiles would be deployed – the officials raised Guam as a possibility for the ballistic missile, but U.S. allies are hardly eager to host the missiles and paint a bullseye on themselves.

Defense spending. Speaking of U.S. allies, NATO’s 2018 annual report was released Thursday, with details on members’ progress toward the spending goal of 2 percent of gross domestic product. European member states hit a five-year high of 1.51 percent, with spending surging especially in Bulgaria, the Baltics and the Netherlands. Still, only six European states (Estonia, Greece, Latvia, Lithuania, Poland and the United Kingdom) met the 2 percent target in 2018, and Germany, where spending as a share of GDP was stable at 1.23 percent, is testing Washington’s patience. Der Spiegel reported Wednesday that the German finance minister had cut the planned spending increase for defense, and Chancellor Angela Merkel does not appear interested in intervening. The revised 2019 military budget will be 2.5 billion euros ($2.8 billion) smaller than before, and according to Der Spiegel, spending will reach only 1.35 percent of GDP by 2020.

China’s slowdown. In the first two months of 2019, China’s industrial output grew at the slowest rate in 17 years, and that wasn’t the only bit of negative economic news released on Thursday. The unemployment rate rose to 5.3 percent in February from 4.9 percent in December. And private fixed-asset investment was also slower than last year, rising by 7.5 percent after climbing by 8.7 percent in 2018. The news wasn’t all bad, however, as retail sales held steady at the same rate of growth as in December, property investment reached a five-year high of 11.6 percent and infrastructure investment was also up.

Honorable Mentions

  • Italian Deputy Prime Minister Matteo Salvini said Thursday that he will oppose any memorandums of understanding with China if he believes they are a threat to national security.
  • On Wednesday, the British Parliament voted against leaving the European Union without a deal. It will vote Thursday on seeking an extension to talks with the EU, a move that is likely inevitable regardless of the outcome in the vote.
  • Germany’s Ifo Institute and DIW institute both cut their 2019 growth forecasts for Germany: to 0.6 percent from 1.1 percent in Ifo’s case, and to 1 percent from 1.8 percent in DIW’s. The German government’s last forecast, released in January, predicted growth of 1 percent.
  • Russia’s parliament passed new fines on Wednesday for internet users who show “blatant disrespect” for the state.
  • The Czech Republic’s largest telecommunications network operator said Thursday that the risks involved in working with China’s Huawei were manageable.